One of the most remarkable aspects of the past half-decade has been a complete lack of change. Year after year, the economy grew at a subpar pace, inflation remained subdued and stocks have bounded ever higher. Simply owning a cross section of industries yielded solid annual results. #-ad_banner-#Yet in just the first five weeks of 2015, it’s become increasingly clear that we’ve busted out of the same old, same old. Across the global economy, major changes are afoot. And investors can no longer hang back and let the market simply work its magic. It’s time for a more active approach… Read More

One of the most remarkable aspects of the past half-decade has been a complete lack of change. Year after year, the economy grew at a subpar pace, inflation remained subdued and stocks have bounded ever higher. Simply owning a cross section of industries yielded solid annual results. #-ad_banner-#Yet in just the first five weeks of 2015, it’s become increasingly clear that we’ve busted out of the same old, same old. Across the global economy, major changes are afoot. And investors can no longer hang back and let the market simply work its magic. It’s time for a more active approach to portfolio management. Here are five key stats that explain why 2015 is already quite distinct from 2014. Rig Count The fallout from plunging oil prices began to be felt two-to-three months ago, but we’re just getting started. Consumers have been inclined to save the windfall thus far, but may be emboldened to start spending more once their bank accounts are sturdy enough. Meanwhile, capital spending and employment levels in the U.S. energy industry are only now starting to feel the impact, a trend which should strengthen with each passing quarter. The number of oil and gas rigs in… Read More

$40? $50? $60? Nobody really knows where the price of oil will stabilize in coming quarters. #-ad_banner-#And the eventual upturn? Supply destruction is taking place right now, which will eventually push oil prices back above $80, but that process may take several years to play out. Against such a backdrop, it’s quite tricky to peg a current fair value for the companies that produce oil and gas. They’ll be solid values when oil starts to rebound, but could also be dead money if oil prices stay in the current range for many quarters to come. One area that does hold… Read More

$40? $50? $60? Nobody really knows where the price of oil will stabilize in coming quarters. #-ad_banner-#And the eventual upturn? Supply destruction is taking place right now, which will eventually push oil prices back above $80, but that process may take several years to play out. Against such a backdrop, it’s quite tricky to peg a current fair value for the companies that produce oil and gas. They’ll be solid values when oil starts to rebound, but could also be dead money if oil prices stay in the current range for many quarters to come. One area that does hold the potential for a solid and rapid rebound is the companies that provide services to the energy producers. The simple reason: some of them are now trading far below tangible book value. If they retain sufficiently strong balance sheets and generate at least break-even cash flow in 2015, then stable energy prices should remove the current panicky atmosphere enough for these stocks to be valued at least in line with their net assets. Here are three energy services providers that look vastly oversold and are starting to attract value investors. McDermott International, Inc. (NYSE:… Read More

I have a relative, who is well into her 70’s, and she absolutely loves stocks. Can’t get enough of them. Any other asset class is simply too boring. #-ad_banner-#But she’s making a huge mistake. At her age, her retirement portfolio should also have ample exposure to bonds and other stable assets. After all, the next 40% stock market pullback (which seems to happen nearly once a decade) can always appear without much notice. Yet it’s hard to make a case against stocks and for bonds with such people. After all, bonds… Read More

I have a relative, who is well into her 70’s, and she absolutely loves stocks. Can’t get enough of them. Any other asset class is simply too boring. #-ad_banner-#But she’s making a huge mistake. At her age, her retirement portfolio should also have ample exposure to bonds and other stable assets. After all, the next 40% stock market pullback (which seems to happen nearly once a decade) can always appear without much notice. Yet it’s hard to make a case against stocks and for bonds with such people. After all, bonds offer insulting yields right now. Annuities don’t fare much better. But these are anomalous times. The value of bond yields will eventually increase, and for long-term focused investors, it’s crucial that a constantly changing mix of assets make up your portfolio, so risk is reduced as you get closer to retirement. That’s the clear concept behind target date funds, which automatically adjust portfolios as the years pass. I discussed these funds roughly two years ago on our sister site InvestingAnswers.com. I encourage you to read that piece to get a key sense of the approach… Read More

An old investing maxim suggests that “as goes January, so goes the year.” And when you consider that the major indices wobbled sideways in January, seemingly ending a multi-year uptrend, it is dawning on investors that the year ahead may deliver so-so gains for investors. #-ad_banner-#That should spell trouble for initial public offerings (IPOs), which tend to only flourish when markets are rallying. However, the recent 66% first-day gain for Box, Inc. (NYSE: BOX) suggests that IPOs are poised for another year of high demand and robust gains. Investors, it seems, just can’t get enough of young companies… Read More

An old investing maxim suggests that “as goes January, so goes the year.” And when you consider that the major indices wobbled sideways in January, seemingly ending a multi-year uptrend, it is dawning on investors that the year ahead may deliver so-so gains for investors. #-ad_banner-#That should spell trouble for initial public offerings (IPOs), which tend to only flourish when markets are rallying. However, the recent 66% first-day gain for Box, Inc. (NYSE: BOX) suggests that IPOs are poised for another year of high demand and robust gains. Investors, it seems, just can’t get enough of young companies with robust growth potential. Another Banner Year To be sure, 2014 was among the best years ever for IPOs. Bankers brought 275 companies public, the best showing since 2000. The $85 billion in proceeds also marks the best year since 2000. Healthcare (especially biotech) led the way, with 102 deals being successfully priced. Tech stocks were once again in vogue as well. And Alibaba Group Holding Ltd (NYSE: BABA) surely gave the market a nudge, when it raised $22 billion in September 2014. The average IPO in 2014 generated a 13% one-day pop, which explains why investors like to… Read More

When Jonas Salk introduced a vaccine for the polio virus in 1957, scientists widely assumed that cures would soon be found for many other common but lethal ailments. Yet, nearly six decades later, we’re still talking about the dreadful impact of Ebola, influenza and many other viruses. #-ad_banner-#It would seem as if medical researchers remain in the dark in their search for cures, but behind the scenes, substantial progress is being made. We may just be a few years away from a major breakthrough that will lead to end of lethal viruses. A wide range of companies are focusing on… Read More

When Jonas Salk introduced a vaccine for the polio virus in 1957, scientists widely assumed that cures would soon be found for many other common but lethal ailments. Yet, nearly six decades later, we’re still talking about the dreadful impact of Ebola, influenza and many other viruses. #-ad_banner-#It would seem as if medical researchers remain in the dark in their search for cures, but behind the scenes, substantial progress is being made. We may just be a few years away from a major breakthrough that will lead to end of lethal viruses. A wide range of companies are focusing on the problem, and for investors, that spells opportunity. In April 2014, I looked at the small- and micro-cap companies focusing on vaccines for viruses.  Since then, shares of Novavax, Inc. (Nasdaq: NVAX) surged 70%, while NanoViricides, Inc. (Nasdaq: NNVC) has largely treaded water and Inovio Pharmaceuticals, Inc. (NYSE: INO) slumped roughly 30%. Why is Novavax garnering greater investor affection? These small biotech firms live and die by the results of clinical trials and FDA approval. The company’s RSV vaccine, which treats viruses in infants, earned a fast-track approval designation from the FDA. This is a clear message from regulators that… Read More

Now is the time to invest in the housing market, but you must be selective. As my colleague Ian Floyd recently noted, the collapse in oil prices will bring renewed pressure to homebuilders, especially those in oil-rich states such as Texas. That state had been one of the few bright spots on the housing landscape. Not anymore. In the upcoming earnings season, Texas-focused homebuilders will likely give a very cautious view, and analysts are already anticipating the headwinds. Case in point: JMP Securities recently downgraded Forestar Group, Inc. (NYSE: FOR) from outperform to market perform, thanks to the company’s considerable… Read More

Now is the time to invest in the housing market, but you must be selective. As my colleague Ian Floyd recently noted, the collapse in oil prices will bring renewed pressure to homebuilders, especially those in oil-rich states such as Texas. That state had been one of the few bright spots on the housing landscape. Not anymore. In the upcoming earnings season, Texas-focused homebuilders will likely give a very cautious view, and analysts are already anticipating the headwinds. Case in point: JMP Securities recently downgraded Forestar Group, Inc. (NYSE: FOR) from outperform to market perform, thanks to the company’s considerable exposure to Texan real estate.  Ian cites D.R. Horton, Inc. (NYSE: DHI), Pulte Group, Inc. (NYSE: PHM) and Lennar Corp. (NYSE: LEN), the state’s number one, four and five largest homebuilders, respectively, as companies to avoid at current oil prices and to watch closely as earnings season kicks into high gear. But the drop in oil prices can be seen in an entirely different light. Consumers are now reaping a major windfall from lower energy prices and for homebuilders with exposure to other parts of the country, the stars may be aligning for a robust rebound. In fact, a few… Read More

Biotech stocks had a banner year in 2014. Agios Pharmaceuticals, Inc. (Nasdaq: AGIO), Avanir Pharmaceuticals, Inc. (Nasdaq: AVNR) and OvaScience, Inc. (Nasdaq: OVAS), for example, each rose roughly 400%. #-ad_banner-#Indeed, each year brings another set of home run stock picks in this sector, thanks to the twin pillars of FDA approval and promising clinical trial results. Trying to handicap the next big biotech winner can be tricky. My current favorites include Synergy Pharmaceuticals, Inc. (Nasdaq: SGYP) and Threshold Pharmaceuticals, Inc. (Nasdaq: THLD). They have compelling drugs in development and possess impressive potential catalysts in 2015. Outside of biotech, stocks with… Read More

Biotech stocks had a banner year in 2014. Agios Pharmaceuticals, Inc. (Nasdaq: AGIO), Avanir Pharmaceuticals, Inc. (Nasdaq: AVNR) and OvaScience, Inc. (Nasdaq: OVAS), for example, each rose roughly 400%. #-ad_banner-#Indeed, each year brings another set of home run stock picks in this sector, thanks to the twin pillars of FDA approval and promising clinical trial results. Trying to handicap the next big biotech winner can be tricky. My current favorites include Synergy Pharmaceuticals, Inc. (Nasdaq: SGYP) and Threshold Pharmaceuticals, Inc. (Nasdaq: THLD). They have compelling drugs in development and possess impressive potential catalysts in 2015. Outside of biotech, stocks with 100% potential upside are even trickier to spot. I spent the holidays looking at a wide range of stocks that could deliver such a return. Many candidates, as it turns out, also carry too much risk. Of course predicting triple-digit gains is more of a guidepost that a specific prediction. When I looked at three 100% potential gainers, in September 2013, only Novavax, Inc. (Nasdaq: NVAX) rose that much (128%), while Merge Healthcare, Inc. (Nasdaq: MRGE) rose 39% and Lionbridge Technologies, Inc. (Nasdaq: LIOX) rose 53%. In other words, a basket approach would have served you well.  Instead, I like to… Read More

Thanks to the sharp pullback in bond yields in recent months, focus is shifting back to their counterpart in the equities sphere: dividend stocks. Investors can now choose from solid, yet safe, payouts, companies that generate impressive dividend growth and an industry that is likely to be a magnet for dividend hikes in the coming year. #-ad_banner-#But let’s face it. There are so many stocks to choose from that produce solid and growing income streams that it can be hard to truly know which stocks are best. Perhaps… Read More

Thanks to the sharp pullback in bond yields in recent months, focus is shifting back to their counterpart in the equities sphere: dividend stocks. Investors can now choose from solid, yet safe, payouts, companies that generate impressive dividend growth and an industry that is likely to be a magnet for dividend hikes in the coming year. #-ad_banner-#But let’s face it. There are so many stocks to choose from that produce solid and growing income streams that it can be hard to truly know which stocks are best. Perhaps the basket approach is better. In the past few years, the field of exchange-traded funds (ETFs) that focus on dividend producers has continued to expand. Dozens of solid options now exist, and if you own three or four of them, then you can get all the exposure you’ll need to this category of securities. Investors can also seek out mutual funds in their pursuit of dividend stocks, but as I recently noted ETFs offer similar exposure with lower costs. Vanguard Dividend Appreciation ETF (NYSE: VIG) With more than $20 billion in assets under management (AUM), this is the largest fund… Read More

  Across a wide range of industries, a combination of dividend increases and shareholder buyback programs has led this to be the “era of shareholder perks.” #-ad_banner-#As I recently noted in my kick-off to a multi-part look at dividends, I suggested that the recent pullback in bond yields sets the stage for a renewed appreciation for dividend payers. In part two, I focused on stocks with 4%-to-5% yields and ample safety, and in part three of the series, I looked at individual stocks poised for robust dividend growth. In that look at companies with fast-growing dividends, I noted solid prospects… Read More

  Across a wide range of industries, a combination of dividend increases and shareholder buyback programs has led this to be the “era of shareholder perks.” #-ad_banner-#As I recently noted in my kick-off to a multi-part look at dividends, I suggested that the recent pullback in bond yields sets the stage for a renewed appreciation for dividend payers. In part two, I focused on stocks with 4%-to-5% yields and ample safety, and in part three of the series, I looked at individual stocks poised for robust dividend growth. In that look at companies with fast-growing dividends, I noted solid prospects for such stocks in various industries, such as insurers. Yet, the most fertile area for such companies can be found in the banking sector. Better Late Than Never The financial crisis of 2008 was so devastating to the balance sheets of major banks and so scary to banking regulators that the thought of cash-sapping dividends were out of the question. Some banks have been slow to regain their footing when it comes to dividends. The dividend for Morgan Stanley (NYSE: MS) for example, peaked at $1.08 a share in 2007 and currently stands at just $0.40 a share —… Read More

As part of our multi-part series about dividend stocks, we are taking a comprehensive look at the wide range of dividend strategies that investors are currently deploying. For example, in part two of the series, I looked at stocks with dividend yields in excess of 4%, which also have a built in margin of safety. #-ad_banner-#Of course such stocks carry a clear flaw: Although interest rates now appear to remain quite low in 2015, they are bound to eventually rise higher in coming years. And as the yields on fixed income investments start to rise, they will start to draw… Read More

As part of our multi-part series about dividend stocks, we are taking a comprehensive look at the wide range of dividend strategies that investors are currently deploying. For example, in part two of the series, I looked at stocks with dividend yields in excess of 4%, which also have a built in margin of safety. #-ad_banner-#Of course such stocks carry a clear flaw: Although interest rates now appear to remain quite low in 2015, they are bound to eventually rise higher in coming years. And as the yields on fixed income investments start to rise, they will start to draw funds away from stocks that are likely to produce only modest dividend growth. That’s why some investors don’t focus on the dividend yield, but instead on dividend growth. The appeal is self-evident: stocks that can produce income streams that march higher and stay ahead of comparative fixed-income yields, promise more robust long-term returns. Not only do such stocks, many of which yield 2%-to-4%, produce a higher payout than bonds, but they also hold the promise of solid price appreciation if they are undervalued. In contrast, bond yields are unlikely to fall much more, and as they eventually rise, bond prices… Read More